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whichever  applies. 

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required.  The  following  diagrams  illustrate  the 
method: 


1  2  3 


1 

2 

4 

5 

L'«x«mplair«  film*  fut  rtproduit  grie*  i  la 
ginArosit*  d»: 

Blbliotheque  nationale  du  Canada 


Lm  imagM  tuivantaa  ont  *ti  raproduitas  avac  la 
plua  grand  soin.  eompta  tanu  da  ta  condition  at 
da  la  nattati  da  I'axampiaira  film*,  at  an 
conformitA  avac  laa  eonditiona  du  contrat  da 
filmaga. 

Laa  axampiairaa  originaux  dont  la  couvartura  an 
papiar  aat  imprimaa  aont  fllmaa  an  eommancant 
par  la  pramiar  plat  at  an  tarminant  aoit  par  la 
darniira  paga  qui  comporta  una  amprainta 
d'impraaaion  ou  d'illuatration.  soit  par  la  sacond 
plat,  aalon  la  caa.  Toua  laa  autraa  axamplairas 
originaux  aont  filmia  an  commanpant  par  la 
pramiira  paga  qui  comporta  una  amprainta 
d'impraaaion  ou  d'illuatration  at  an  tarminant  par 
la  darniira  paga  qui  comporta  una  talla 
amprainta. 

Un  daa  aymbolaa  auivanta  apparaitra  sur  la 
darniira  imaga  da  chaqua  microficha.  salon  la 
caa:  la  symbola  — ^  signifia  "A  SUIVRE",  la 
aymbola  ▼  aignifia  "FIN  ". 

Laa  cartaa.  planchaa,  tablaaux.  ate.  pauvant  Atra 
filmis  i  daa  taux  da  reduction  dif f Grants . 
Lorsqua  la  documant  aat  trop  grand  pour  4tra 
raproduit  an  un  saul  clich*.  il  aat  filmi  A  partir 
da  I'angla  supAriaur  gaucha.  da  gaucha  A  drrita, 
at  da  haut  an  baa.  an  pranant  la  nombra 
d'imagaa  nicasaaira.  Laa  diagrammaa  suivants 
illuatrant  la  mathoda. 


2 

3 

5 

6 

»«ciocopr  nsoiuTioN  tkt  chait 

(ANSI  and  ISO  TEST  CHART  No.  2) 


x^PPLIED   IIVHGE     Inc 

t65i  Eoit    Moin   Street 

RochesHr.   Ne«  York        i«609      USA 

(716)  taj  -  0300  -  Pho™ 

(716)  ?aa-5989  -Fa. 


J 


BEQUEATHING 
OUR    DEBTS 

What  it  means  for  Policyholders  to  Borrow  on 
their  Life  Insurance  Policies — Reduction  of 
Protection  to  Widows  and  Orphans- 
Some  Possible  Remedies 


Views  and  Suggestioiu  -of  Repreaentative 
Newapapera.  taken  from  their  Editorial 
Pages,  following  the  Discussion  on  this 
subject  by  the  Association  of  Life  Insur- 
ance Presidents 


ASSC)CIATION  OF  LIFE  INSURANCE  PRESIDENTS 
NEW  YORK.  1914 


Imprinted  for  the  Information  of  its  Policyholders 
by  the 

^  CANADA  LIFE  ASSURANCE  COMPANY 


m 


i!iiiiii[:ii:iiiirainiiiiiiiBiiiiiiiiiiiiiiiiiii!ii!iiiiiiii>iii;!<:iiiiiM 


BEQUEATHING  OUR  DEBTS 

iiiiiiiiiiifiiiiiiiiiiiiiiiiji 

At  the  recent  conference  of  the  Association  of  Life  Insurance 
Presidents  in  New  York  the  evils  arising  from  the  growing  practice 
of  borrowing  on  the  security  of  Life  Insurance  policies  was  fully 
discussed. 

The  results  of  this  practice  were  shown  to  be  so  serious  to 
beneficiaries,  as  well  as  to  the  companies  themselves,  that  leading 
newspapers  all  over  the  continent  made  editorial  reference  to  ^t. 

A  number  of  extracts  from  these  articles  have  been  collected 
and  they  are  submitted  to  policyholders  of  the  Canada  Life 
Assurance  Company  herewith. 

In  your  own  inti.-est  consider  the  following: 

Don't  borrow  unless  you  must. 

Don't  borrow  more  than  you  actually  need. 

Pay  the  loan  off  as  soon  as  possible.  The  company  will 
accept  instalments  of  any  amount  at  any  time.  Every  such  (Miy- 
ment  strengthens  your  policy  and  reduces  the  interest  charge. 

N.B.— It  is  a  notable  fact  that  90  per  cent,  of  the  loans 
made  on  Life  Policies  are  never  repaid  by  the  borrowers. 

Toronto.  May,  1914, 


iiyiiiiiiiiiiiiwii 


e  910833 


BEQUPATHING     OUR      DF.BTS 


EDITORIAL  COMMENTS. 


TAKING   MONKY   FR<   \i   T||K   BABY'S   BANK. 

Many  loan*  not  all  obtained  on  the  iiecurity  of  a  life  inaurunce  policy  ma>  iic 
likanad  to  taking  money  from  the  baby'i  bank  and  not  replacing  it,  lor  not  more  than 
eight  per  cent,  of  all  the  money  borrowed  in  this  manner  it  ever  repaid  except  through 
the  policy  lapaing  or  maturing.  .  .  .  There  ia  material  for  aurpriae  when  one  con- 
•idere  the  extant  to  which  the  practice  haa  gone,  aa  ahown  at  the  meeting  of  the  Aaao- 
ciation  of  Life  Insurance  Preeidenta  in  New  York.  Theae  loana  are  reported  to  have 
increaaed  from  onc'third  of  one  per  cent,  of  the  reserve  funda  of  American  companiea 
in  1886  to  aixteen  per  cent,  in  1912  and  to  nearly  eighteen  per  cent,  this  year.  At  the 
cloae  of  laat  year  out  of  the  three  billion  five  hundred  million  dollara  of  reaerve  funda 
of  all  companiee  it  ia  atated  that  five  hundred  and  fifty  million  dollara  had  been  loaned 
to  policyholdera.  ...  If  the  companiea  did  not  perinit  audi  loana  and  it  i»  un- 
likely they  could  all  be  brought  to  conaider  auch  a  plan  there  would  be  other  and 
more  expenaive  waya  to  the  borrower  to  accomplish  the  aame  thing.  Tk* 

problem,  it  ia  evident,  ia  not  eaay  of  aolution.     "Newark  (N.J.)  Newa." 

FOR   THF.  LAST  AND  MOST  EXTREME   NECESSITY   ONLY. 

.  .  .  A  life  insurance  policy  ought  to  be  one  of  the  most  sacred  things  in  a 
man's  life.  It  ia  the  stipend  that  he  ia  laying  aaide  for  the  protection  of  his  family 
in  caae  he  should  be  auddenly  taken  away.  To  mortgage  that  providential  lund  ought 
to  be  not  the  eaaieat  and  the  rr  tdiest  thing  to  do.  but  the  last  and  the  most  extreme. 
It  ia  almoat  like  taking  penniea  out  of  the  babiea'  aavings  bunk. 

"Cedar  Kapids  (la.)  Republican." 

A         TGAGINC;   DEFENSELE.SS   HEIRS. 

Instead  of  payi.  _  ..a  we  go,  it  is  so  much  easier,  if  so  much  less  wise,  to  borrow 
from  posterity.  Extravagance  often  goes  hand  in  hand  with  improvidence:  and  thia 
ia  an  extravagant  age  in  an  extravagant  country.  That  it  is  a  rich  country  is  perhapa 
aome  temptation,  but  no  excuse.  Various  evidences,  collective  and  individual,  attest 
this  inclinat'on  to  mortgage  the  future.  What  the  indignant  reflections  of  our  poster- 
ity, who  must  shoulder  the  penalty  in  either  or  both  added  tax  or  depleted  inheri'ance, 
does  not  diaturb  our  blithe  and  free-handed  unconcern.  ...  An  impre'  ive 
aign  of  the  times  is  the  indictment  drawn  by  the  insurance  fraternity  both  com- 
paniea and  commisaioners — against  the  startling  increase  in  the  tendency  lor  >he  in- 
aured  to  borrow  from  their  OAin  heira  by  dipping  into  the  principal  of  the  protection 
fund  for  their  families.  It  in  the  unbroken  increase  in  this  borrowing  pro- 

pensity that  ia  the  disconcerting  el-  ^ent.  ...  In  part  we  may  blame  the  cost  of 
high  living  for  personal  and  municipui  necessaries;  but  also  in  part  there  is  in<lisputably 
reflected  the  cost  of  high  living,  individual  or  collective.  Not  the  ni:cessaries,  but  the 
luxuries,  mainly  account  for  our  temptation  nd  our  propensity  to  mortgage  our  de- 
fenseleaa  heirs.    -"Boston  (Mass.)  News  Bureau." 


(;R0\VING    EXTRAVAGANCE   AND  THRIFTLESSNE.SS. 

Few  people,  we  take  it,  are  in  temper  to  consider  counsel  to  be  thrifty  at  a  time 
like  this,  when  the  spir-'t  of  the  Christnias  festival  opene  hearts  and  purses.      ^  et  the 


BEQUEATHING     OUR     DEBTS 


iMwi  of  diracling  atMnlion  to  tho  growing  avil  of  •■travaganca  and  eonaaquani  thrift- 
laaantM  ia  navarthalaaa  praaant.  To  inaat  tha  raal  or  fanciad  naad-  M  to-day  paopk 
mn  incraasingly  drawing  upon  the  fund  laid  aaide  tor  to-morrow,  the  rainy  day  whan 
ihay  ahall  naad  it.  At  tha  convanlion  of  lift,  inauranca  praaidanta  in  Naw  York  it  wai 
akown  thai  tha  borrowing  of  monay  on  lifa  inauranca  policioa  ia  coiutantly  increasing. 
.  .  .  Inauranca  man  iaar  that  a  conlinuaitca  of  tha  borrowing  policy  will  wp  con- 
fidanca  in  lifa  inauranca  companiaa  and  thay  ara  concerned  with  the  problem  of  how  to 
diacouragait.  Thair  taak.  it  will  be  racognixad,  ia  a  Herculean  ihm.  Thay  muat.  totuc- 
eeed.  make  of  a  ipendthrift  people  a  thrifty  oitc.     "Dubuque  (la.)  Telegraph  flarald." 


A   DANCEROIIS   AND   IMPRUDENT   AfT. 

It  waa  atatad  at  a  recent  seaaion  of  the  Life  Inaurance  Prcsidenu'  Aaaociation 
held  in  New  York  that  tha  number  of  peraona  holding  life  inaurance  who  borrowco 
money  on  their  policiea  wa>  increaaing  to  a  diaquieting  dri  ee.  .  .  .  Aa  tha  total 
amount  of  auch  loana  ia  already  $500,000,000.  the  proapect  of  ita  bamg  materially 
increaaed  ia  not  a  pleaaant  one,  for  the  policyholder  who  raiiea  a  loan  on  his  policy 
commits  a  dangerous  and  imprudent  act.  There  is  no  doubt  that  in  many 

of  the  casL'S  where  the  polic"  Kaa  been  pledged  the  pledge  m  never  redremed.  and  either 
the  policy  ia  permitted  to  la  •  or  only  a  small  port  of  the  sum  for  which  it  calls  is  ulti- 
mately  payable  to  the  designated   beneficiary.     .     .     .     "Lexington   (Ky.)  Leader." 

WIVES  SHOULD  MAKE   INVESTIGATION. 

.  .  .  There  ought  to  be  in  each  State  aome  "atateamen"  wise  enough  to  see 
thai  to  compel  insurance  companiea  to  encourage  policyholders  running  into  debt  is 
unwise,  criminal,  dishonest  to  the  children  and  the  wife.  Pending  such  action,  we  ad- 
vise the  wives  of  insured  men  to  find  out  just  what  value  there  is  to  the  protection 
which  insurance  is  supposed  to  give  them,  and  juat  how  much,  if  anything,  the  husband 
has  borrowed  on  his  policy — for  every  dollar  thua  borrowed  will  be  taken  away  fiom 
the  family  in  caae  of  death.  The  whole  system  is  preposterous  encouraging  men  to 
save  money  for  the  protection  of  their  familiea  AND  THEN  BY  LAW  COMPF.LLI  NG 
THE  INSURANCE  COMPANIES  TO  TEMPT  SUCH  MEN  TO  RUN  INTO 
DEBT.     .     .     . — "New  York  Evening  Jouma'." 

IJODV    BLOW   TO  THRIFT. 

A  report  just  issued  by  '.he  Association  of  Life  Insurance  Presidents  reveaU 
the  astonishing  <a  i  that  insurers  in  this  country  have  borrowed  the  immense  sum  of 
$587,000,000  on  their  policic«  .  .  .  The  most  serious  part  of  the  outlook,  how- 
ever, is  that  in  other  years,  not  inflicted  with  industrial  depression,  these  heavy  borrow- 
ings occurred  at  intervals  and  there  is  a  steady  upjoji  •  of  it  Roing  on  all  the  time. 
Such  destruction  of  vast  amounts  of  insurance  is  n  ;    a  Iiody  blow  to  thrift  but 

makes  (or  unhappiness  and  uncertainty  in  the  home.        Utica  (N.Y.)  Globe." 


FOR   EiMERGENCIES   ONLY. 

.  .  .  It  is  unf'  rtunate  that  the  loan  provisions  of  life  insurance  contracts 
are  operating  to  destroy  their  value.  While  such  provisions  havr  offered  a  medium 
of  relief  to  men  in  times  of  financial  stress,  it  was  not  calculated  they  would  be  employed 
except  in  cases  of  emergency.  It  is  found,  however,  that  unnecessary  and  frequent 
borrowing  on  life  insurance  contracts  now  results.  It  is  but  another  indication  that 
the  American  people  are  ceasing  to  be  thrifty.  In  fact.  Americans  are  not  noted  for 
being  thrifty  in  any  time — much  less  in  this  generation.  It  is  well  the  officials 

of   the  different  companies  are  sending  out   w«rning8.--"Elizabeth   (N.J.)  Journal." 


BEQUEATHING     Ol'R     DEBTS 


IMPAIRIN(;   INSURANC  F.   VALUP.N 

.  .  .  Tha  convantion  oi  Ufa  iiwuranc*  praudanu,  in  ■■■■inn  al  Naw  York 
kwt  «*«ali,  hai  givan  Mrioua  attanlion  to  thaaa  conditioiM.  .  .  .  Iniurancc  paopi* 
•ra  aliva  to  tha  importanca  of  diacouraging  luch  impairmant  o(  iniurancc  value*  It 
goaa  back,  of  couraa,  to  tha  iraat  praaant-day  problam  of  Antarican  life,  ntravagance. 
F'orchandadnaMi  and  raal  thrift  aaani  to  ba  virtual  law  and  laaa  priaad  in  tha  raca  for 
quickly  tot  waallh.     "Parkariburg  (W.  Va.)  Diipatch  Nawi." 

REPAYMENT  UNtSl'AI.. 

.  .  .  What  i>  mora  diiquiating  ia  tha  atatamanl  that  onca  .  oin  ii  mada 
it  II  not  apt  to  b«  repaid  but,  on  tha  contrary,  mora  will  be  taken  r  .1  the  policy 
parmiti  from  lima  to  time  It  ihii  mil  rather  painful  evidence  of  failing  ihrifl  on  ihc 
part  of  a  tubilantial  body  of  the  peupla>  -"Providence  (R.I.)  Journal." 

DEPI.ORABI.K   (OMMENT   ON   EXTRAVAGANCE. 

The  increaia  of  the  boi '  »>  ig  of  money  on  life  policiei  11  believed 
to  be  tha  reiull  of  extravagant  living  on  tt'4  part  of  tha  iniured.  It  ii  not  commend- 
able and  ihould  be  diicouraged  by  life  iniurance  companiea.  The  real  purpoie  of  life 
iniuranca  i«.  and  nhould  be,  10  provide  for  the  lupport  of  wife  or  dependent  family 
in  caie  of  the  death  of  tne  miured.  .  .  .  Wha>  a  deplorable  comment  thii  ii  m  the 
extravagance  of  thouaandi  of  American  people.—    Rock  liland  (III.)  Argui." 


i 


LIVING   BEYOND  THEIR   MEANS. 

.  ,  .  There  ii  juit  one  anawer  to  thii  aitounding  encroachment  iipnn  a 
protective  inveitment  -the  American  people  are  increaiingly  living  beyond  their 
meani.  .  .  .  The  report  of  the  Aiaociation  of  Life  Iniurance  Preiident*  telU  u» 
that,  ai  the  rnult  of  thii  unusual  expaniion  of  borrowing  on  life  iniurance,  beneficiarieii 
will  be  deprived  of  more  than  half  a  b'Uion  dollari  of  life  inr-  -ance  protection.  Thi* 
prediction,  by  the  way,  can  be  lafely  niade  becauie  experience  ^wi  that  a  la'  ro- 
portion  of  the  iniurance  protection  thui  withdrawn  is  never  replaced  Mak  all 
due  allov%\nce  for  the  poiiibility  of  profitable  re-investmrnt  for  thii  b  >:  rowed  1  ...ey, 
the  inevitable  loaaand  waste  implicit  in  thii  practice  must  total  to  i^.ar.y.  tiiai.y  millions. 
When  one  coniiders  the  extent  to  which  American  huibandi  and  !'t,.hci»  have  re- 
couric  to  life  iniurance  ai  the  one  lure  guarantee  of  thr'  'amiliei  a^u  '<'  <mpnverish- 
ment  this  astounding  increase  of  the  practice  of  borrowr^L'  -in  life  insu'- >nce  appeals 
as  most  inhuman  and  sinister.  Evidently  the  mania  lor  iiving  beyond  orr's  means 
ha<  reached  a  point  where  it  no  longer  balks  at  the  threat  of  a  beggaring  death. 

-"Milwaukee  (Wis.)  Free  Press  " 

IMPROVIDENCE  THE   CAUSE. 

Such  a  practice  is  not  in  keeping  with  the  ideals  of  life  insurance  om- 
panies  and  they  are  doing  well  in  striving  to  make  their  policyholders  see  the  danger 
of  it  Probably  the  basic  trouble  is  in  the  preient  traniitory  tendency  of  people  to 
live  up  to  the  amount  of  their  income.  Initead  of  basing  their  mode  of  life  on  what 
they  can  afford  they  are  limited  only  by  their  inability  to  spend  more  than  they  poaaeai. 
While  fortune  smiles  things  go  along  smoothly  enough,  and  they  usually  carry  sufficient 
life  insurance  to  make  them  feel  that  they  are  protected.  When  some  misfortune 
comes  of  a  business  natur, ,  or  sickness  or  something  else,  these  ir  ,.rovident  people 
are  often  too  ready  to  avail  themselves  of  the  borrowing  opportunities  of  their  insur- 
ance policies  (-fence  the  great  increase  deplored  by  the  insurance  companies-  and 
justly.      "Cambridge  (Mass.)  Standard." 


BEQUEATHING     OUR     DEBTS 


IMPAIRING   OLD  AGE  PROVISIONS. 

i.  indii^rj^  kT''"'  "">''•'  °'  ''^'"'  ""  '°  "  '^•"  '^y°"'l  '»">"«  h"  become 
«  mdicted  by  the  tremendous  expansion  of  loan,  upon  life  in.ur.nce  policies  which 
w«  brought  to  attention  at  a  recent  convention  of  life  insurance  men.  The 

ri-^T'T  •'"*"''''«•  ~  f"  °W  «8e.  made  through  outstanding  polide.    is 

toans.  Not  alone  for  government  are  economy  and  retrenchment  necessary.  The 
Ume  ,s  long  overdue  when  mdividuals  must  resume  the  old-fashioned  habit  of  living 

(N  Y Tioumir'"  '""'""'  '^'''''-  °'  '•  '""  "°*  '"^°"'*  '•"•"       "AlbanJ 

A   DANGER   SIGNAL. 

<^«  *'''°  t-^  "°t  «al«e  that  a.  a  nation  we  are  living  beyond  our  means,  need, 
but  to  examme  the  annual  reports  of  the  life  insurance  companies.  Borrowing  mo^y 
on  I.fe.n.urance.s-or  ought  to  be-a  last  extremity.  .  .  .  Reckless  extravagance 
..a  national  characten.t.c.  But  when  it  carries  us  too  far  it  always  has  led  ^d  it 
always  will  lead  to  most  undesirable  results,  to  forced  and  sudden  curtailments  which 
are  extremely  uncomfortable.     When  those  times  come  they  are  inexpressTuyh^^er 

lai.)  Union  ••  '""~"     borrowing  on  life  insurance  policies.--San  Diego 

DEFEATS  THE   PURPOSE  OF   LIFE   INSURANCE. 

The  Association  of  Life  Insurance  Presidents  calls  attention  to  the  rapid  increase 

of  policy  loans  m  recent  years.     .     .     .     The  magnitude  of  this  loss  of  protection 

o  dependent,  can  be  better  appreciated  by  a  few  comparisons.     Half  a  billion  dollars 

.s  in  exce«  of    he  total  amount  of  ordinary  life  insurance  in  force  in  any  single  State 

Zl^M  U       ■  '  '""''";"  '**'  ^"""  °'  ^'^"  ^°'^-  P—ylvania.  llIinL.  Oh  o 

and  Massachusetts  .  .  .  The  Association  is  serving  an  excellent  purpo«^  ii^  call- 
ing attention  to  the    ncrease  in  nolicv  loans  I  ;f. 

iii,tifi»J  ;„  .►.        .•  ^        policy    oans.     .     .     .     Life  insurance  companies  are 

dlltlh  ■""""""«  to  discourage  policy  loans.  Figures  show  that  they  too  often 
dcleat  the  real  purpose  of  insurance.-   "Portland  (Ore.)  Journal." 

DOUBLING   THE   PREMIUM   RATE. 

if  this  «,,;  r.1  ,J'''.**'°'''  "'"/"^  object  and  purpose  of  life  insurance  is  defeated 
If  this  sort  of  thing  is  permitted  to  go  on.  policies  should  not  be  treated  or  regarded 
sho^H  ."k  '°'J°"°«'"8.  ">°"«y  "«Pt  in  extreme  emergencies.  Certainly  they 
should  no    be  used  as  securities  in  business  transactions,  for  it  is  a  question  of  law   as 

Tnl  l:JT  1  \i'  T"^^^""  '•"  "  "«•''  "»  '°  "-  ''"  P°'-^  """^-t  the  Unowle;,;: 
on  hi    „T  beneficiar.es.      .      .      .     Now.    if   a    policyholder   borrows   money 

on  his  policy,  even  at  the  current  rates  of  interest  for  loan  money,  and  if  he  borrow^ 

rate  for  the  entire  policy.  For  instance,  if  $1,250  were  borrowed  on  a  $5,000  policy 
that  was  issued  under  normal  conditions,  it  would  practically  mean  that  the  bor^wer 
was  paying  premiums  on  a  $10,000  policy.     .     .     .  -"Boston  (Mass.)  Evening  Glor" 

LOANS   REMAIN   UNPAID. 

deman J^^  ^f''  "'  '"rl"^  ""^  '"  "  ""'""  ^^"""^  '""°'"'  "  '""^'"f^  by  the  increased 
demands  for  oans  on  life  insurance  policies  which  was  brought  to  attention  at  a  recent 
convention  of  life  insurance  men.     ...     At  present  the  nol.V^K^U        u 
allv  fh.  ^»t,»  ,„  J  J  1  .    •  .  P"»ent  tie  policyholders  have  virtu- 

ally the  nght  to  demand  loans  on  their  policies.      That  right  has  been  freely  exercised 


BEQUEATHING     OUR     DEBTS 


S 
I 


to  raiK  fund,  for  nr.i«:ell«neou.  purpows.  Such  uw  of  it  ha.  a  tendency  to  defeat  the 
purpoae  of  life  m.urance.  Each  policy",  value  i.  impaired  by  m>  much  a.  is  the  loan 
agam.t  It  which,  once  placed,  i.  more  likely  to  remain  than  to  be  repaid.  -Portland 
(Me.)  Telegram." 

THE   PROTECTION   WITHDRAWN. 

The  warning  iuued  recently  by  president,  of  great  life  insurance  companie. 
against  the  system  of  obtaming  loans  on  policies  was  timely.  A.  they  My  but  a  .mall 
proportion  of  the«>  loan,  are  ever  repaid,  the  re.ult  being  that  the  protection  intended 
tor  widow,  and  orphan,  is  withdrawn,  defeating  in  large  meaaure  the  original  pur- 
POTC  of  the  policy  contract.     .      .      .      "Helena  (Mont.)  Record." 

BUT   \  SMALL   PORTION   REPAID. 

...     And  undoubtedly  the  privilege  has  been  of  great  value  to  rame  people 
But  It  Mem.  that  only  a  .mall  portion,  .ay  ten  per  cent.,  of  .uch  loan,  are  ever  repaid. 

*^°  r  °'  '*'°  '^''"^  '"  ''"P=''«^-  «"«^  '"  ""any  ca.es  the  whole  is  forfeited 
...  The  object  of  insurance  is  the  protection  of  the  family  in  the  caw  of  the  death 
of  the  person  insured.  Such  protection  is  easily  destroyed  or  lessened  if  the  practice 
mentioned  become,  too  general.     .      .      .  -"Lynn  (Mass.)  News, " 

LITTLE   LES.S  THAN   ROBBING   BENEFK  lARIES. 

One  dangerous  method  of  gambling  with  the  capital  which  should  belong  to 
posterity  IS  attracting  close  attention  of  the  life  insurance  companies,  which  have 
appointed  a  committee  to  investigate  the  .preading  and  evil  practice  of  borrowing  on 
life  insurance  policies.  ...  A  man  who  borrows  money  on  his  insurance  policy 
deliberately  takes  chances  with  the  protection  which  he  has  supposedly  arranged  for 
his  widow,  his  children  or  other  dependents.  Borrowing  on  an  in.urance  policy  is 
almost  certain  to  lessen  that  protection  to  a  great  extent,  for  it  has  been  discovered 
that  not  more  than  ten  per  cent,  of  the  money  that  is  secured  as  a  loan  from  the  insur- 
ance companies  by  policyholders  is  ever  repaid.  ...  The  Association  of  Life 
Insurance  Presidents  has  undertaken  a  campaign  to  reduce  the  borrowing  habit  among 
policyholders.  Here  is  grave  need  for  a  campaign  of  education.  Borrowing  on  life 
insurance  policies  is  little  less  than  robbing  those  who  may  be  in  want  after  the  present 
generation  is  gone.  It  is  a  practice  little  short  of  criminal  and  one  that  to  a  large 
degree  nullifies  all  the  protection  that  life  insurance  offer..  It  cannot  be  discouraged  too 
strongly.— "Hartford  (Conn.)  Post." 

THE   POLICY   SHOULD   BE   SACRED. 

...  The  thing  to  be  guarded  against  is  reckless  borrowing.  Depreciating 
the  value  of  an  insurance  policy  for  purchasing  an  automobile,  or  for  social  extra- 
vagances, or  for  precarious  investments,  is  almost  on  a  par  with  actual  theft  from 
the  beneficiaries.  It  is  usually  persons  whose  dependents  are  in  need  of  the  protection 
that  borrow  on  their  policies  for  the  most  reckless  purposes.  A  policy  should  be  held 
sacred  for  the  benefit  of  those  who  are  left  to  struggle  with  the  world  after  the  death 
of  the  insured.  That  was  the  original  purpose  of  the  holder  of  the  policy,  and  all  temp- 
tation  to  subvert  that  end  should  be  resisted  unless  some  tangible  gain  can  be  secured 
by  depreciating  the  value  of  the  policy  through  borrowing.  Protection  of  dependent, 
should  be  kept  m  mind  at  a!!  hazards.      "Wilkes  Bane  (Pa.)  Record." 

A   ROBBERY   OF   COMFORT.S. 

Insurance  companies,  while  very  ready  to  lend  money  on  life  insurance  policies, 
are  beginning  to  take  a  very  sensible  attitude  on  the  matter  in  issuing  warnings  as  to 


BEQUEATHING     OUR     DEBTS 


the  very  large  increaae  in  the  practice  and  the  corresponding  fact  that  the  payments 
on  these  loans  are  very  slow  in  forthcoming,  the  borrowers  seeming  prone  to  keep  up 
the  interest  payments  only,  while  the  principal  of  the  policy  remains  decreased.  .  .  . 
With  many  men  the  life  insurance  policy  they  hold  constitutes  the  entire  estate  which 
they  may  leave  to  their  family  at  death.  To  impair  it  by  borrowing  is  to  impair  the 
future  protection  of  the  family  in  the  event  of  an  unexpected  demise  and  is  not  a  mere 
temporary  accommodation  personally,  but  almost  a  robbery  of  comforts  for  those  who 
may  remain  behind.  Going  slower  on  life  insurance  loans  will  be  the  best  policy  for 
many  an  American  citizen  to  follow.     .     .     . — ^"Taunton  (Mass.)  Gazette." 

DEFEATING  ITS  PURPOSE. 

.  .  .  The  tendency  of  policyholders  not  to  repay  loans  from  insurance 
companies  and  the  fact  that  over  a  half  billion  dollars  is  now  outstanding  in  such 
form  present  a  real  problem  to  insurance  companies.  The  policyholder  is  robbing 
the  beneficiary  to  meet  business  needs  or  to  indulge  in  extravagance,  thus  defeating 
the  prime  purpose  of  insurance.     .     .     . — "Oklahoma  City  (Okla.)  Times." 

INkMICAL  TO  INSURANCE  BUSINESS. 

The  life  insurance  companies  are  directing  attention  to  the  growth  of  a  practice 
among  a  great  many  policyholders  that  they  regard  as  a  deplorable  evil  and  are  agitating 
the  matter  of  taking  some  concerted  action  to  put  a  check  on  it.  This  is  the  borrowing 
of  money  on  policies.  True,  that  is  a  privilege  that  the  policyholder  is  entitled  to  exer- 
cise, but  in  so  doing  he  defeats  the  very  purpose  for  which  he  takes  out  life  insurance 
by  reducing,  according  to  the  amount  of  his  loan,  the  protection  and  benefits  of  the  same, 
unless  he  should  make  repayment,  which  only  about  te:i  per  cent,  of  these  borrowers  do, 
according  to  the  reports  of  the  companies.  .  .  .  1 1  is  obvious  why  the  effect  should 
be  inimical  to  that  business  when  so  many  policies  return  but  a  portion  of  their  face 
value  to  the  beneficiaries  either  at  the  time  they  mature  or  become  payable  because 
of  the  death  of  the  persons  on  whose  lives  they  are  written.  Disappointment  is  certain 
to  be  entertained  in  such  cases,  while  it  is  frequently  the  fact  that  the  borrower  gets 
tired  of  paying  the  interest  on  the  loan  he  has  secured  on  his  policy,  in  addition  to  the 
premium  on  the  latter,  and  allows  it  to  lapse.     .     .     .--"Fall        -er  (Mass.)  Globe." 

PAWNING   PROTECTION   OF   FAMILIES. 

When  a  sudden  demand  is  made  for  an  unusual  sum  of  money  the  holder  of  a 
life  insurance  policy  is  tempted  to  pawn  the  protection  he  has  built  up  for  his  family, 
and  as  sudden  demands  for  unusual  sums  of  money  are  growing  more  frequent  among 
us  year  by  year  policy  loans  are  increiising  in  trolume.  .  .  .  The  life  insurance 
presidents  hold  out  no  suggestion  as  to  checking  this  growing  custom,  but  a  general 
campaign  against  it  may  yet  be  necessary  in  the  interest  of  those  for  whose  benefit 
life  insurance  exists.— "Syracuse  (N.Y.)  Post-Standard." 

PAWNING  THE   PROVISION   FOR   WIDOWS. 

Life  insurance  has  advanced  tremendously  in  recent  years.  It  has  improved 
its  methods  materially.  Prejudice  against  it  has  almost  disappeared.  Itnowenjovs 
unprecedented   favor,   both  as  a  protection  and  as  an  investment.     .     .  A  m.  -< 

might  negotiate  a  loan  on  his  life  insurance  policy  to  finance  a  sickness  or  «  funera.. 
but  he  Iocs  not  do  it  to  pay  the  grocer,  the  butcher  or  the  clothing  bill.  In  general, 
it  is  said  to  be  not  the  high  cost  of  living  but  the  INCREASINGLY  EXTRAVAGANT 
WAY  OF  LIVING  THAT  PROMPTS  SO  MANY  AMERICANS  TO  PAWN  THE 
PROVISION  THEY  INTENDED  TO  MAKE  FOR  THEIR  WIDOWS  AND  THEIR 
CHILDREN  OR  FOR  THEIR  OWN  OLD  AGE.     .     .     .—"Cleveland  (O.)  News  " 


BEQUEATHING     OUR     DEBTS 


HOW    MUCH   FOR   NECESSITIES   OR     AUTOMOBILES? 

The  presidents  of  the  big  insurance  companies  of  the  country  are  holding  a 
convention  in  New  York,  anc*  some  interesting  facts  are  coming  out  in  the  speeches 
about  life  insurance.  .  .  .  Not  one  out  of  ten  men  who  pledge  their  policies  for 
loans  ever  pay  back  the  money.  It  is  gone  for  good,  and  their  families  have  just  that 
much  less  in  case  of  death.  The  presidents  are  talking  long  and  patiently  how  to  over- 
come the  habit  of  putting  policies  ui  pawn  in  this  way.  It  would  be  interesting  to  know 
how  much  of  the  half  billion  dollars  went  to  pay  for  necessities,  how  much  for  the  pur- 
chase of  homes,  how  much  for  automobiles,  and  how  much  simply  represented  hard 
luck. --"Gary  (Ind.)  Tribune." 

BORROWING   FROM   THE   WIDOW. 

The  convention  of  presidents  of  life  insurance  companies  in  session  in  New  York 
today  has  before  it  among  other  things  the  vexing  problem  of  the  mortgaged  life  in- 
surance policy.  .  .  .  The  life  insurance  presidents  do  well  to  consider  this  problem. 
They  do  well  to  discLts  ways  and  means  of  lessening  the  evil.  They  do  well  to  sound 
an  alarm  in  the  interests  of  the  bereaved  dependents  who  must  pay  all  these  millions 
in  loans  if  the  policyholders  do  not.  Your  life  insurance  policy  is  a  sacred  trust.  It  is 
a  fund  for  the  protection  of  your  loved  ones  when  you  die.  When  you  borrow  money 
on  it  with  the  policy  as  security,  YOU  ARE  BORROWING  FROM  YOUR  OWN 
WIDOW  AND  YOUR  OWN  ORPHANS.  And  when  you  are  dead  you  cannot  pay. 
Think  a  little  deeper  about  that  loan  on  your  policy,  Mr.  Policyholder.  Pay  it  if  you 
can.  Reduce  it,  anyway.  Don't  leave  your  widow  and  orphans  the  legacy  of  a  bad 
debt — with  you  as  the  debtor.  -"South  Bend  (Ind.)  Tribune." 

ROBBING   PETER   TO   PAY   PAUL. 

.  .  .  The  abuse  is,  of  course  within  the  rights  of  the  policyholder,  but  he  is 
abusing  his  future  or  the  future  of  the  beneficiary,  as  experience  shows  that  scarcely 
ten  per  cent,  of  the  money  so  borrowed  is  ever  paid  back  and  often  policies  lapi.^  because 
of  this  practice.  TTie  mere  statement  of  the  fact  that  loans  upon  policies  have  in- 
creased from  $19,000,000  in  1888  to  $587,000,000  in  1912  is  sufficient  to  show  the  extent 
of  this  unfortunate  practice  of  robbing  Peter  to  pay  I  ,ul.  Here  is  a  vast  problem 
representing  a  condition  that  publicity  of  its  gravity  ought  to  serve  to  check.  "Balti- 
more (Md.)  American." 

LOANS   MEAN    LO.SS   AND   SUFFERING. 

The  theory  of  life  insurance  is  that  it  is  for  the  protection  agianst  some  calamity 
or  hard  times.  At  the  death  of  the  breadwinner  the  insurance  becomes  a  protection 
to  the  widow  and  the  children.  Or  the  policy  matures  when  the  earning  capacity  of 
the  breadwinner  is  on  the  decline  and  the  money  comes  in  to  tide  the  insured  through 
to  the  end.  With  this  theory  in  mind,  the  amount  of  loans  against  the  comfort  of 
widowhood  and  old  age  appears  stupendous.  .  .  .  Probably  a  share  of  the  bor- 
rowing is  made  to  meet  contingencies  for  which  the  insurance  was  taken  in  the  first 
place.  But  much  must  stand  for  loss  and  suffering,  because  the  loans  were  made. — 
"Utica  (N  Y.)  Observer." 


KEEPING   UP   WITH   THE   PROCESSION. 

.  .  .  That  means  that  policyholders  have  been  borrowing  big  sums  on  their 
policies,  borrowing  on  the  future,  and  paying  interest.  The  amounts  borrowed  must 
come  out  of  the  returns  of  the  policies  at  maturity  or  at  death  of  the  holders.  It  is 
not  a  good  showing  and  a  bad  practice,  but  then  there  has  been  a  mighty  urge  to  keep 


BEQUEATHING     OUR     DEBTS 


up  with  the  proceMion  in  the  last  twenty-five  yeara.  something  of  the  strength  of  which 
may  be  seen  in  the  growing  loans  on  life  policies.— "Youngstown  (O.)  Vindicator." 

THE  LOAN   BEHIND  THE  TRAGEDY. 

.  .  .  Extravagant  living,  the  struggle  to  keep  up  with  one's  fashionable 
neighbors,  is  as  disastrous  as  the  struggle  to  keep  up  immense  armaments,  which  are 
bringing  European  powers  to  the  verge  of  bankruptcy.  Gone  are  the  days  of  tl  rift 
and  modest  living.  Life  is  one  long  pretense,  a  keeping  up  of  appearance  until  comes 
the  tragedy  so  often  seen  in  the  wanted  column:  "A  middle-aged  woman  of  refined 
appearance  wants  a  position  as  housekeeper.  Good  home  rather  than  wages."  Behind 
many  of  these  annuncements  will  be  found  an  insurance  policy  with  such  a  heavy 
loan  on  it  as  to  leave  just  enough  for  funeral  expenses.— "Springfield  (Mass.)  Home- 
stead." 

BORROWER  ESC.\PES.  THE  WIDOW  REGRETS. 

•  .  .  Extravagance,  as  a  national  trait,  is  no  more  clearly  shown  than  by 
these  statistics.  There  is  much  merit  in  the  proposition  to  make  borrowing  on  policies 
less  easy  of  ■(rcomplishment.  Borrowing  on  them  is  seductive.  They  are  not  actively 
and  constantly  urging  repayment  like  the  private  creditor  or  endorser,  and  yet  time 
slips  around  and  in  due  season  cuts  down  the  tardy  borrower,  who  thereby  escapes 
regret,  but  at  the  expense  of  his  bereaved  family.— "Williamsport  (Pa.)  Sun." 

INDULGENCE   On   HARD  TIMES? 

.  .  .  The  rising  line  of  loans  corresponds  fairly  well  with  the  rising  cost 
of  living:  and  it  also  corresponds  fairly  well  with  the  automobile  fever.      .      .  Once 

a  loan  is  made  on  a  policy,  there  it  remains,  and  is  found  cutting  down  the  family 
insurance  fund  when  the  poli:y  becomes  payable,  usually  when  it  is  most  needed. 
On  the  total  business  of  thirty-nine  leading  companies  the  average  ratio  of  policy  loans 
to  reserves  at  the  close  of  191 1  was  15.98  per  cent.  Kansas  is  one  of  28  States  where 
the  ratio  exceeded  this  figure,  the  ratio  of  loans  to  reserves  in  this  State  being  at  that 
time  16.78  per  cent  The  principle  of  hfe  insurance  is  present  sacrifice  for  a  future 
good.  Do  these  figures  indicate  a  decUne  in  that  spirit,  or  a  necessity  that  leaves  choice 
out  of  account?  Does  it  mean  a  reign  of  pleasure  and  indulgence  or  hard  times:  high 
living  or  high-cost  living?  The  purposes  for  which  the  loans  were  made  would  show, 
but  these  purposes  as  a  rule  are  not  reported  to  the  insurance  companies.— "Topeka 
(Kan.)  Capital." 

LUXURIES    vs.    LIFE    INSURANCE. 

.  .  .  To  hold  the  business  the  companies  gave  loans  on  policies  to  enable 
those  who  otherwise  would  have  to  drop  out  to  keep  the  protection  for  their  families. 
It  has  happened,  though,  that  this  primary  object  has  been  lost  sight  of  by  policyholders. 
To-day  loans  art  asked  for  many  reasons  other  than  retention  of  protection.  Many 
leans  are  secured  for  the  payment  of  debts  that  never  should  have  been  allowed  to 
accumulate,  for  business  expansions-of  questionable  wisdom  and  even  for  the  purchase 
of  luxuries.     .     .     . — "Portsmouth  (N.H.)  Times." 


AUTOMOBILES   vs.    PROTECTION. 

The  Association  of  Life  Insurance  Presidents  in  session  in  .New  \ork  is  dis- 
cussing questions  that  are  of  interest  in  hundreds  of  thousands  of  American  homes. 
.  .  .  But  the  demands  of  an  extravagant  age  have  prompted  borrowing  on  policies 
for  far  different  reasons.  Many  an  automobile  has  been  bought  with  the  money  which 
should  have  remained  in  the  fund  created  for  the  benefit  of  the  wife  and  children  in 


BEQUEATHING     OUR     DEBTS 


9 


the  event  of  the  death  of  the  head  of  the  houte.  It  i>  well  for  the  president*  of  the 
inaurmnce  companies  to  call  attuntion  to  this  matter  and  to  urge  reform.  .  .  "Water- 
ville  (Me.)  Sentinel." 

TOO   MUCH   HIGH   LIVING. 

An  unhealthy  aign  ii  manifested  in  American  i^e  by  the  rapid  and  steady  in- 
crease in  loans  made  upon  life  insurance  policies.  This  may  be  justly  taken,  noi  so  much 
as  an  indication  of  bad  business  conditions,  as  an  increase  in  extravagant  h .  ,ng  on  the 
part  of  the  families  of  men  who  carry  life  insurance  policies.  The  carrying  of  a  life 
insurance  policy  is  an  absolute  nece.«sity,  by  men  who  can  possibly  pay  the  premium 
and  who  have  other  people  dependent  upon  them.  Perhaps  there  was  some  discussion, 
years  ago,  as  to  the  advisability  of  carrying  a  life  insurance  policy,  but  that  question 
is  not  open  for  discussion  now.  An  insurance  policy  is  part  of  the  foundation  of  every 
thrifty  life.  But,  borrowing  money  on  an  insurance  policy  is  not  gotd  busi- 

ness, unless  the  necessity  is  urgent.  When  loans  of  this  sort  are  made  in  so  many 
diffe.  -nt  parts  of  the  country,  and  made  so  ofi.n.  a  state  of  affair  indicated  whici 
does  not  speak  well  for  American  life.  This  condition  indicates  th  \merica  is  suffer- 
ing  from  the  cost  of  too  much  high  living  and  that  some  people  who  are  not  able  to  do 
so.  are  enjoying  luxuries  and  conveniences  wKich  their  income  does  not  junify. 
—  "Montgomery  (/  la.)  Advertiser." 

EXTRACTING   THE   BENEFIT. 

Men  lorrow  close  up  to  the  cash  value  of  their  policies  to  buy  motor 
cars,  to  take  their  fam.lies  abroad,  to  indulge  themselves  in  other  ways.  They  may  be 
able  to  afford  the  motor  cars,  »he  tours  and  the  indulgences,  but.  of  course,  as  the 
insurance  companies  have  pointed  out.  the  loan  made  on  the  policy  extracts  from  it  the 
protection  to  the  policyholder's  family  -the  very  thing  for  which  he  took  out  the  policy 
and  has  been  paying  his  premiums.      .      .      . —"Washington  (DC.)  Times." 


is  country, 
arrived  few 
one  loaded 
ible  source 
nations  are 
individuals 
to  equalize 
I  of  general 


A   SYMPTOMATIC   liABIT. 

Borrowing  on  insurance  policies  is  a  habit  which  is  growing  in  th 
It  should  be  discouraged.  ...  In  the  spending  era  at  which  we  have  ; 
think  of  the  solid  advanta^s  of  an  intact  insurance  policy  as  compared  with 
up  with  loans.  The  habit  of  borrowing  from  the  most  convenient  avail' 
is  a  symptom  of  the  financial  heedlessness  of  the  day.  Cities.  States  and 
borrowing  almost  up  to  the  limit  of  their  interest  paying  powers,  and 
naturally  think  they  can  do  Hkewise.      .      .  The  object  of  insurance  being 

the  shocks  and  multiply  the  incentives  to  thrift,  any  question  involving  it  i 
interest. — "Paterson  (N.J.)  Chronic' .." 

HAZARDOUS  WASTE  FOR  CURRENT  EXPENSES. 

Tne  unwisdom  of  borrowing  money  on  life  insurance  policie.s  has  just  been 
shown  in  an  impressive  manner  by  the  results  of  an  investigation  m»de  by  the  general 
counsel  for  the  Association  of  Life  Insurance  Presidents.  .  .  .  These  figures  call 
attention  to  the  folly  of  obtaining  money  upon  the  life  insurance  policy  that  should 
be  held  as  a  sacred  trust  for  the  benefit  of  the  family  of  the  insured.  .  .  .  The 
fact  that  one  can  have  his  life  insured  and  at  the  same  tin-  be  able  in  the  hours  of 
trouble  to  get  needed  cash  upon  his  life  insurance  policy,  is  one  of  the  best  features  of 
modern  life  in  ance.  But  too  many  have  taken  unwise  advantage  of  this  convenience. 
Hundreds,  and  perhaps  thousands,  have  borrowed  money  for  speculative  purposes,  or 
have  consumed  the  fund  for  luxuries  which  were  beyond  the  means  of  the  borrower. 
Many  policies  have  been  milked  dry  during  the  lives  of  the  insured  and  have  b;n 


10 


BEQliEATHING     OUR     DEBT.- 


practicaily  worthleu  at  the  time  when  they  should  have  provided  legacies  lor  the  help> 
leu.  There  is  a  general  sentiment  among  insurance  companies  to-day  to  diiicouraga 
policy  loans.  This  seems  wise.  It  is  hazardous  waste  for  current  expenses  or  for 
business  u.?r<<?rtakings  of  the  fund  thut  should  be  held  as  a  safeguard  for  the  future.— 
"Scranton  (Pa.)  Republican." 

UNQUESTIONABLE   WASTE. 

...  At  the  recent  meeting  of  the  Association  of  Life  Insurance  Presidents 
attention  was  called  to  the  rapid  increase  of  policy  loans  and  a  later  report  b\-  that 
Association  gives  further  details  of  the  increase  not  only  of  policy  loans,  but  ct  the  per 
cent,   of  outstanding   loans  as  compared  with  -eserves.  .     .     Many  sermons  on 

American  extravagance  have  been  preached  in  recent  ye&rs,  but  few  more  impressive 
than  these  figures  showing  the  dissipation  of  this  form  of  eav.ngs.  Some  of  the  borrowed 
money,  of  course,  goes  into  other  investments,  but  the  m-ai;  is  unquestionably  wasted. 
-  "Asheville  (N.C.)  Gazette-News." 

BORROWING   ON   A    POLICY   IS   BAD   POLICY. 

Borrowing  money  on  a  life  insurance  policy  is  a  bad  policy  and  the  companies 
are  beginning  to  protest  against  it.  The  practice  has  attained  the  proportions  of  a 
genuine  evil.  .  .  .  The  insured  simply  gets  the  money  and  blows  it  in  and  there 
is  nothing  for  the  beneficiary  when  the  policy  is  allowed  to  lapse.  The  companies 
would  do  well  to  discourage  the  practice,  which,  it  is  to  be  ferred.  has  had  too  much 
encouragement  from  their  agents  in  the  past.— "Lowell  (Mass.)  Morning  Courier- 
Citizen." 

AGAINST   PUBLIC   POLICY, 

.  .  .  Of  course,  it  is  easy  to  understand  why  business  men  avail  themselves 
of  this  avenue  of  raising  funds  when  a  particularly  good  opportunity  for  an  investment 
is  presented  to  their  notice.  Alas,  that  the  "good  thing"  so  seldom  proves  itself,  prob- 
ably only  one  in  ten,  according  to  the  available  statistics.  Too  expensive  b-bits  are 
another  incentive  to  get  "easy  money"  and  in  view  of  these  facts  life  insurance  presi- 
dents consider  it  to  be  their  duty  to  the  public  to  make  it  more  difficult  (or  the  insured 
to  hypothecate  the  funds  that  have  accumulated  in  the  reserves.  Just  what  form 
this  protection  will  take  we  are  not  advised;  doubtless  there  will  be  many  conferences 
of  the  insurance  executives  before  a  definite  plan  is  evolved,  but  on  general  principles 
we  should  say  the  tendency  noted  should  be  discouraged  as  aga...st  public  policy.— 
"Pasadena  (Cal.)  News." 

LIFE   INSURANCE   POLICY   SHOULD   BE   HELD   SACRED 

.  .  .  People  used  to  have  the  notion  that  an  insurance  policy  was  not  to  be 
drawn  upon  except  as  a  la;  resort.  [Doubtless  most  people  still  believe  they  are  pro- 
ceeding on  that  theory,  but  exaggerate  the  importance  of  every  family  crisis.  A  family 
ought  to  give  up  all  its  luxuries,  move  into  a  house  that  will  match  the  income,  no 
matter  at  what  cost  to  pride,  ought  to  cut  away  the  last  vestige  of  the  old  life  before  it 
would  touch  the  insurance  policy.  That  should  be  held  sacred.  .  .  .— "Spring- 
field  (O.)  News." 

THE   VERY   LAST  RESORT. 

.  .  .  The  only  safe  way  is  for  the  holder  of  a  life  insurance  policy  to  regard 
it  as  a  sacred  trust  which  must  not  be  infringed  upon  except  under  conditions  involving 
the  direst  nece.wity.  This  should  be  the  very  last  resort,  and  the  temptation  to  raise 
some  easy  money  thereby  for  any  object  that  is  less  than  absolutely  imperative  should 


BEQUEATHING     OUR     DEBTS 


II 


be  steadfastly  rewated.     Every  policyholder  should  regard  this  fund  as  one  belonging 
not  to  him  but  to  his  wife  and  family.     That  same  solicitude  and  foresight   which 
proiT.pted  its  accumulation  should  be  effectual  to  secure  its  preservation.     .     .     .  - 
Philadelphia  (Pa.)  Inquirer." 

TAMILIKS    KEPI    IN    IGNORANCE. 

.  .  .  The  constructior.  placed  by  the  'ife  insurance  pn  Jdents  up^n  these 
figures — that  they  indicate  a  growing  tendency  to  extravaganr.e  on  the  part  of  the 
American  people — seems  logical  and  reasonable.  .  .  .  The  r  lost  deplorable  phase  of 
'liis  borrowing  mania  is  the  injustice  it  works  to  the  familieo  and  dependents  of  tb-. 
policyholder.  In  innumerable  instances,  as  was  pointed  out  at  last  week's  meeting, 
the  families  are  kept  in  ignorance  of  the  loans,  and  when  ths  policyholder  dies  they 
discover  that  they  have  lost  all  or  part  of  the  protection  wiich  the  po.,^-y  afforded 
them.     .     .     .—"Wheeling  (W.  Va.)  Register." 

THE   LAW   AT  FAULT. 

.  .  .  If  we  had  the  power,  we  should  make  it  impossible  for  any  policyholder 
to  BORROW  A  SINGLE  DOLLAR  ON  HIS  POLICY,  unless  it  were  just  enough 
to  pay  the  premium  in  the  event  of  his  being  unable  to  tsl<!  c  ire  of  that  premium. 
.  .  .  It  IS  a  system  absolutely  ruinous  to  women  and  children  who  depend  upon 
insurance.  And  it  is  unjust  and  oppressive  to  the  insurance  companies,  causing  them 
to  be  unjustly  suspected.  Over  and  over  it  happens  that  some  woman  whose  husband 
has  suddenly  died,  leaving  her  with  youn^  children,  appears  with  her  life  insurance 
policy,  expecting  to  get  the  full  amo'ir.t  of  the  policy.  She  is  told—quite  tru  ifully— 
that  her  husband  had  borrowed  the  money  befoi-  ■  he  died,  that  his  policy  is  vsurth  very 
little.  She  is  told  also,  which  is  true,  thet  the  h  v  actually  compels  the  life  insurance 
companies  to  lend  money  in  this  way — giving  to  the  insured  to  be  squandered  or  used 
in  speculation  that  which  should  be  the  family's  protection.  .  .  .  The  funds 
of  life  insurance  companies  should  be  kept  ...tact  for  the  benefit  of  the  insured- not 
paid  out  in  loans  that  encourage  policyholders  to  run  into  debt  and  forget  the  very 
purpose  for  which  life  insurance  was  instituted.     .     .     . — "Altanta  (Ga.)  Georgian." 

UNDERMINING   PUBLIC    CONFIDENCE. 

...  It  is  recognized  by  the  life  insurance  men  that  if  this  tendency  shall 
continue,  confidence  in  insurance  will  be  lost.  Very  many  mer.  it  is  explained,  make 
loans  on  their  policies  without  their  families  knowing  of  the  fact.  At  death,  therefore, 
the  facts   are   realized   by   those   who  expected  to  bft  the  beneficiaries.     That  kind  of 

experience  is  certain  to  injure  the  repute  of  insurance  as  a  protection  to  the  family.   .    . 
— "Philadelphia  (Pa.)  Times." 


RETURN  TO   HOMELY   PRINCIPLES. 

.  .  .  Many  a  wife,  not  in  the  confidence  of  her  husband,  is  deluded  in  the 
belief  that  she  will  get  the  face  of  her  husband's  policies  at  his  death  deluded  because 
he  has,  without  her  knowledge,  borrowed  to  the  limit  on  the  policies.  ...  A 
writer  in  the  Chicago  News  si  .ests  that  there  should  be  a  general  revival  of  the 
crabbed  philosophy  of  Poor  Richard.  "He  that  goes  a-borrowing  goes  a-sorrowing." 
says  Poor  Richard.  And  he  says  again:  "What  maintains  one  vice  would  bring  up 
two  children.  "  Also  Poor  Richard  gives  tliis  stem  rule  of  conduct:  "Rather  go  to  bed 
supperless  than  rise  in  debt  "  Of  course,  such  harsh  words  are  repellent  to  a  generation 
that  is  not  given  to  denying  itself  anything  within  reach  and  that  blithely  goes  in 


12 


BEQUEATHING     OUR     DEBTS 


debt  on  the  ilighteat  provocation.  But  they  are  as  true  now  a*  they  were  when  the 
wise  and  whimsical  Ben  Franklin  addreiaed  them  to  hia  fellow-American*. — "St. 
Joseph  (Mo.)  News-Press." 

INJURING  THE  REPUTE  OF   INSURANCE. 

There  is  no  more  telling  indication  of  the  extravagant  tendencies  of  Americana 
than  I  lie  showing  that  borrowing  of  money  on  life  insurance  policies  is  constantly 
increasing  till  it  has  come  to  alarm  insurance  executives.  .  .  .  The  convention  of 
life  insurance  presidents  in  New  York  has  given  serious  attention  to  these  conditions. 
.  .  .  It  is  recognized  by  the  life  insurance  men  that  if  this  tendency  shall  continue 
confidence  in  insurance  will  decrease.  Very  many  men,  it  is  explained,  make  loans 
on  their  policies  without  the  knowledge  of  their  families.  At  death  the  facts  are 
realize!  by  those  who  expected  to  be  the  beneficiaries.  That  kind  of  experience  is  certain 
to  injure  the  repute  of  insurance  as  a  protection  to  the  family.  Insurance  people  are 
alive  to  the  importance  of  discouraging  such  iir-pairment  of  insurance  values.  It  goes 
back,  of  course,  to  the  great  present-day  probi  m  of  American  life-  extra vagance.- 
"Baltimore  (Md.)  News." 

POLICYHOLDERS   SHOULD  THINK  TWICE. 

.     .  It  may  be  that  the  remarkable  period  of  industrial  development  in 

the  last  twenty  years,  and  particularly  in  the  last  decade,  has  furnished  a  temptation 
to  policyholders  to  b>. .  'ow  on  them  at  a  lo<v  rate  of  interest  in  order  to  invest  the  money 
on  prospects  of  a  higher  rate  of  interest.  Most  of  the  loans,  however,  probably  grow 
out  of  a  temporary  need  of  money  due  to  unemployment  or  some  unexpected  misfortune. 
The  finding  that  not  over  ten  per  cent,  of  loans  on  policies  are  ever  repxi't  should  at 
least  cause  policyholders  to  think  twice  before  using  their  policies  as  security.  -  "Tacoma 
(Wash.)  Ledger." 

LACK  OF   SELF    CONTROL   IN   MONEY    MATTERS. 

Half  a  billion  dollars  of  life  insurance  protection  has  been  taken  away  from  the 
wives  and  children  of  the  country  by  the  habit  of  borrowing  on  life  insurance  policies. 
These  figures  are  the  result  of  a  recent  investigation  by  the  Life  Insurance  Presidents' 
Association.  Under  persistent  solicitation  appealing  to  the  feeling  of  moral 

obligation  many  policies  are  taken  out  by  men  with  no  self-control  in  money  matters. 
They  never  judge  of  an  expenditure  by  its  relation  to  their  total  income.  If  the  money 
is  in  their  pocket,  it  is  right  to  spend  it.  The  fact  that  a  premium  payment  is  due 
next  month  is  ignored.     .     .     .   -"Salt  Lake  City  (Utah)  Herald-Republican  " 

BORROWING   WITHOUT   LENDERS'    CONSENT. 

A  timely  warning  with  regard  to  the  practice  of  making  loans  on  life  insurance 
policies  is  sounded  by  the  Association  of  Life  Insurance  Presidents.  .     .     The  whole 

aim  of  life  insurance  is  protection  for  the  family  or  others  who  are  dependent  upon  the 
insured — provision  for  loved  ones  when  their  support  is  removed  by  death.  But 
under  the  circumstances  described  it  is  utterly  failing  of  that  result.  The  money 
that  it  was  intended  to  pile  up  for  protection  of  dependents  is  used  by  the  inoj:-ed  him- 
self in  various  ways.  .  The  warning  the  Association  has  uttered  is  much  to 
its  credit.  It  ought  also  to  give  the  policyholder  something  to  think  about.  Has  he 
any  moml  right  to  borrow  from  his  wide>w  xvithout  her  consent? — "Columbus  (O.) 
Dispatch." 

IN   THE   INTEREST  OF   SUPPOSED   BENEFICIARIES. 

It  has  been  a  cause  of  great  satisfaction  to  the  public  that  life  insurance  has 
become  so  general  in  this  country.      It  has  kept  above  the  poverty  line  millions  of  our 


BEQUEATHING     OUR     DEBTS 


paople  left  othcrwiic  destitute  by  the  death  of  the  family  breadwinner.  .  .  .  Thia 
borrowing  by  policyholderi  ia  no  detriment  to  the  companies.  .  .  .  But  in  the  in- 
terest of  the  supposed  beneficiariea  of  these  policies,  and  of  the  public  upon  which  rest* 
the  burden  of  providing  for  the  unfortunate,  (he  officials  of  the  companies  earnestly 
protest  against  the  practice  of  borrowing  on  policies  and  urge  that  it  shall  cease  except  in 
cases  of  the  most  imperative  necessity. — ^"San  Francisco  (Cal.)  Chronicle." 


SOMETIMKS   PLAIN    MEAMIEARTEDNESS. 

.  .  .  When  a  man  borrows  on  his  policy,  he  expects  to  pay  it  back  soon. 
This  investigation  by  the  insurance  presidents  showed  that  few  of  these  loans  are  ever 
repaid.  The  modern  married  woman  is  ill-fitted  to  cope  with  the  world.  The  time 
that  might  have  provided  her  with  a  breadwinning  equipment,  has  gone  to  service  to 
husband  and  children.  It  is  a  pretty  mean-hearted  man  who  does  not  do  everything 
possible  to  leave  some  degree  of  comfort  behind  him,  and  to  leave  it  intact,  unmort- 
gaged either  by  personal  extravagance  or  business  ambition. — "Cheyenne  (Wyo.) 
State  Leader." 

POOR   BL'SINESS  JUDGMENT. 

Surprising  figures  also  are  presented  in  a  paper  by  President  Childs, 
of  the  Columbian  National  Life  Insurance  Company,  which  indicate  a  growing  habit 
of    borrowing   upon   policies.  Besides   constituting   a   serious   drain   on    the 

funds  of  the  company  this  practice  indicates  poor  business  judgment  on  the  part  o( 
the  policyholder.  The  value  of  his  policy  is  materially  decreased  and  those  dependent 
upon  him  are  afforded  just  that  much  less  protection.  In  many  cases  the  loans  arc 
made  without  knowledge  of  the  policyholders'  families  or  other  beneficiarien.  "New 
Britain  (Conn.)  Herald." 

LIFE   COMPANIES   SHOULD   DRAW    THE   LINE   TIGHTER. 

It  is  unfortunate  that  the  kind  of  borrowing  in  question  cannot  be 
checked  in  the  vast  extent  to  which  it  prevails.  But  the  life  policy,  according  to  its 
terms,  is  a  certificate  of  credit,  and  legislation  could  scarcely  differentiate  in  treating  it. 
But  if  life  companies  would  draw  the  line  more  strictly  and  discourage  such  loaning 
except  in  the  case  of  proof  of  imperative  need,  it  would  go  far.  One  company,  how- 
ever, could  not  do  it  unless  all  its  important  rivals  did  the  snme.  "Montclair  (N.J.) 
Times." 

DRASTIC    ACTION    NECES.SARY. 

The  meeting  of  the  Association  of  Life  Insurance  Presidents  at  ilie  liotei  Aster 
was  of  decided  interest  and  some  very  plain  truths  were  told  at  the  sessions.  Particular 
attention  was  paid  to  the  growing  tendency  of  policyholders  to  mortgage  their  policies. 
It  is  a  pity  that  such  statements  are  absolutely  true,  but  they  are.  We  agree 
with  Mr.  Childs  that  some  drastic  action  is  necessary  in  order  to  put  an  end  to  the 
evil.     "Long  Island  City  (N.Y.)  Star." 

A   NOTICE   OF   WITHDRAWAL   PROPOSED. 

We  imagine,  however,  that  the  rapid  growth  in  the  volume  of  money 
outstanding  in  loans  to  policyholders  is  due  in  part  to  the  growth  in  knowledge  of  what 
a  life  insurance  policy  really  is.  it  has  come  to  be  regarded  as  an  investment  with 
savings  as  well  as  loan  features.  Incidentally  there  is  no  better  security,  from  the  com- 
pany's standpoint,  than  policy  loans.  Some  underwriters  would  welcome  a  law  or 
regulation  empowering  the  companies  to  take  advantage  of  notice  of  either  sixty  or 
ninety  days.     Savings  banks  are  thus  protected  from  runs.      "New  York  Commercial.  ' 


I 


14 


BEQUEATHING     OUR     DEBTS 


SAFEGUARD  THE   BENEFICIARY. 

■  .  .  Much  of  tha  moiMy  goM  into  MiterpriaM  which  mmtarially  boMfit  thoM 
dependent  on  the  policyholder.  Take,  (or  instance,  the  caaa  of  a  man  whose  butinaM 
ia  suffering  from  temporary  depreaoon.  By  pledging  hia  inaurance.  ha  ia  enabled  to 
raise  sufficient  funds  to  carry  it  over  the  atormy  period  and  make  a  success  of  it.  It 
would  be  folly  for  that  man  to  aat  hia  face  against  borrowing  on  his  insurance.  .  .  . 
It  is  true,  of  course,  that  a  large  proportion  of  the  money  secured  by  pledging  policies 
is  wasted  or  diverted  from  the  beneficiaries.  It  is  true,  too,  that  the  practice  is  growing 
and  that  it  is  a  tendency  which  ought  to  he  diacouraged.  A  sufficient  corrective, 
however,  will  be  the  application  of  a  few  common-sense  rules  designed  to  safeguard  the 
inteiejts  of  thoae  for  whoae  benefit  the  policiea  are  iaaued.— "Springfield  (III.)  State 
Journal." 

BORROWING   VALUES  OF   POLICIES  SHOULD  BE  SUBORDINATED. 

It  is  a  highly  important  and  valuable  service  the  Association  of  Life  Insurance 
Presidents  is  rendering  the  public  in  its  endeavor  to  halt  the  growth  of  the  oractice  of 
borrowing  upon  life  insurance  policies.  .  .  .  The  protection  that  ought  to  be  given 
the  family  is  impaired  and  sometimes  practically  destroyed  through  this  system  of 
borrowing  and  any  effort  that  promises  the  lessening  of  this  growing  evil  will  be  wel- 
comed and  encouraged  by  all  thoughtful  persons.  Would  it  not  help  toward  the  desired 
end  if  the  life  insurance  companies  directed  their  agenU  in  soliciting  business  to  subor- 
dinate the  borrowing  value  of  their  policies  and  emphasize  their  value  in  giving  solid 
anJ  permanent  protection>— "Montpelier  (Vt.)  Journal." 


REDUCE  THE  LOAN  VALUE. 

A  report  by  Robert  Lynn  Cox,  formerly  of  Buffalo  and  now  general  counsel  of 
the  Association  of  Life  Insurance  Preaidenta,  on  the  amount  of  loans  made  against 
policies  and  the  effect  on  beneficiariea  contain.!  some  surprising  statistics.  .  .  . 
What  this  borrowing  costs  beneficiaries  is  shown  by  the  fact  that  the  returns  to  com- 
panies by  borrowers  do  not  exceed  ten  per  cent.  .  .  .  How  this  situation  can  be 
remedied  is  not  apparent,  unless  the  companies  greatly  reduce  or  eliminate  altogether 
the  loan  value  of  policies.  But  it  is  to  be  borne  in  mind  that  many  insurance  agents 
who  sell  life  policies  make  much  of  the  loan  value  of  their  policies,  pointing  out  with 
great  force  that  money  can  be  had  on  the  policies  at  any  time  at  a  low  rate  and  be  kept 
as  long  as  it  is  needed.  The  insurance  presidents  might  help  a  little  by  forbidding  their 
agents  to  make  so  much  of  the  loan  value  feature.— "Buffalo  (N.Y.)  Express." 

EDUCATION   RATHER   THAN   LEGISLATION. 

.  .  .  Reports  show  that  not  more  than  ten  per  cent,  of  the  money  borrowed 
nn  insurances  policies  is  ever  repaid.  The  rest  stands  virtually  as  a  charge  against 
the  estate,  to  be  paid  too  often  from  the  small  sum  left  the  widow  and  children.  The 
poliryhoider  mortgages  the  future,  not  of  himself,  but  of  those  for  whom  he  took  the 
policy,  whose  interests  should  be  paramount  with  him.  It  is  not  a  matter  to  be  con- 
trolled by  law.  .  .  .  Public  opinion  must  control  the  matter.  Insurance  officials 
do  well  to  call  attention  to  it.— "Cleveland  (O.)  Plain  Dealer." 

\   GREAT   REFORM. 

.  .  .  If  the  insurance  companies  can  overcome  this  borrowing  evil  they  will 
have  accomplished  a  great  reform.  .  .  .  How  the  companies  can  prevent  this 
tendency  except  by  moral  suasion  it  is  difficult  to  see.  .  .  . — "Harrisburg  (Pa.) 
Telegraph." 


BEQUEATHING     O     R     DEBTS 


IS 


PROTECTION  A   .SACRED  DUTY. 

...  Of  couraa.  if  tha  policy  ii  -nadc  payabi*  to  tha  %»ifa  in  event  of  daaUi 
har  conaant  i*  uaually  naeaiaary  to  aacure  tha  loan.  But  too  i  (tan  thia  coniant  ia  raadily 
obtainad  baeauaa  tha  autoinobila  contribute!  to  har  plaaaura  aa  wall  aa  to  that  of  har 
huaband.  Sh«:  diacount*  ^ha  future  proaparity  which  la  to  take  care  of  the  loan.  To 
protect  hia  fanily  by  life  inauranca  ia  a  aacred  duty  that  every  huaband  and  father 
owaa  to  thoae  dependant  upon  him,  and  it  ahould  be  an  equally  aacred  duty  to  keep 
that  inauranca  unimpaired.  The  policy  ahould  never  be  reaorted  to  for  a  loan  except  for 
a  dire  neceaaity,  and  then  the  aame  motive  that  prompts  the  payment  of  the  prumiuma 
ahould  stimulate  a  daaire  to  repay  tha  loan.  ...  In  the  correction  of  this,  as  in 
tha  correction  of  other  preaent-day  evils,  the  rem«i>  is  in  the  education  of  the  people 
rather  than  in  legislation.     "Naahua  (N.H.)  Telr«raph." 

EDUCATION  THE  SOLUTION. 

"The  Capital"  some  time  ago  commented  on  the  great  incraast^  mi  loana  on  life 
inauranca  policiea,  which  the  managers  of  the  large  companies  regard  as  a  serious  con- 
dition. The  trouble  is  that  the  equitiea  represented  by  insurance  payments  are  squan- 
dered to  satisfy  the  craze  for  pleasure  and  so  the  savings  of  life  insurance  go  to  buy 
automobiles  and  other  purchaaea  that  the  buyers  cannot  in  fact  afford.  Now  comes 
the  "Atlanta  Georgian"  and  demands  that  the  law  stop  this  thing  by  prohibiting  the 
insurance  companiea  from  loaning  on  their  policiea.  But  the  remedy  doea  not  meet 
the  disease  in  several  reapects.     .  This  is  a  matter  for  the  use  of  commonsenae 

and  good  judgment  by  the  policyholder  and  beneficiary.  They  can  do  what  the; 
will  with  their  own.  and  no  law  can  fairly  prohibit  them;  neither  can  the  policyholder 
!-«  gifted  with  good  sense  by  an  act  of  the  legislature.  - "Topelt.i  (Kan.)  Capital  " 
March  9.  1914. 


M 


BEQUEATHING     OUR     DEBTS 


POLICY  LOANS 


The  attention  of  Canada  Life  policyholders  is  urgently  directed 
to  the  foregoing  pages  of  this  booklet.  The  opinions  expressed 
there  are  those  of  many  of  the  most  influential  and  best  known 
newspapers  published  on  the  continent  and  they  reflect  the  unani- 
mous opinion  of  thinking  men  everywhere  that  this  matter  has 
come  to  be  a  serious  menace,  not  only  to  the  widow  and  orphan, 
but  also  to  tht  entire  framework  of  insurance. 

Because  it  is  so  easy  to  obtain  money  in    this    wa\    policy 
holders  somctin  -s  abuse  the  privilege,  obtaining  loans  when  they 
are   not    really    needed,    or    borrowing   a   larger   amount    than  is 
necessary. 

Every  loan  reduces  the  protection  of  your  beneficiary  and 
undermines  the  strength  of  your  policy  contract. 


lilllllllllMillinillllillMIIIHIilllllilllllliM^^^^^^ 


HOLD  ON! 


MiiiHiHuniiuiiiittiini 

Do  not  throw  away  what  you  may  not  be  able  to  get  back. 

Out  of  every  nine  men  applying  for  insurance,    one   is   per- 
manently rejected  because  of  physical  unfitness. 

Perhaps  that  one  could  have  got  it  a  little  while  ago — but  he 
left  it  too  late,  and  some  weakness  or  other  developed. 

If  you  let  your  insurance  lapse,  what  guarantee  have  you  that 
you  will  be  able  to  replace  it  ? 

There  comes  a  time  in  the  life  of  every  man  when  he  realizes 
to  the  full  the  need  of  insurance. 

The   having   it   or  not   having   it   is  the  difference  between 
content  and  bitter  regret. 

Be  on  the  safe  side  and  keep  your  insurance  in  force. 


CANADA  LIFE  ASSURANCE  COMPANY 


iiillillllillllillllllllMWiilll^ 


SIX      FACTS 

From  tht  97th  ANNUAL  REPORT  of 

THE  CANADA  LIFE 

ASSURANCE       COMPANY 


'■ItUIMIIIIMIIHHIiriHtMllldUlirillH^ 


In  important  respects  the  CompMiy  in  i » 1 3  occelled 
it*  record  for  any  previoua  year  in  its  history. 

1.  THE  SURPLUS  EARNED  in  1913  was 
$1,709,959.66.  eueeding  by  over  $179,000  the  earnings 
of  1912,  and  by  a  much  larger  amount  the  earning*  of 
any  previou*  year.  The  present  net  aurpius  is 
$6,183,278.39. 

2.  THE  INCOME  of  $8,094,885.70  was  sreater 
than  that  of  the  previous  year  bv  $696,125.96.  and 
the  greatest  in  the  Company's  history.  The  rate  of 
interest  earned,  which  had  been  steadily  advancing 
since  1899.  was  further  improved  in  1913.  This  is  an 
important  factor  in  producing  surplus. 

3.  THE  ASSETS  were  inci«aaed  by  $3.860.27 1 .32, 
and  now  stand  at  $52,161,794.81. 

4.  THE  TOTAL  ASSURANCES  now  in  force 
are  for  $153,121,363.94.  an  increase  of  over  $8,273,000 
in  the  year. 

5.  THE  PAYMENTS  TO  fK)LlCYHOLDERS  in 
1913  totalled  $2.878.016.1 1,  an  increase  of  $415,051.31 
over  thoseof  1912.  In  addition  to  this.  LOANS  TO 
POLICYHOLDERS  on  security  of  their  policy  con- 
tracts were  made  for  $1,692,248.71. 

6.  THE  MORTALITY  of  the  year  was  again 
more  favorable  than  the  expectation,  and  this,  with  a 
continued  LOW  EXPENSE  RATIO,  contributed  to 
the  earning  of  a  record  surplus. 


